Share price boost for Indian carriers

By Victoria
November 22, 2012 19:51

Yesterday shares of both Jet Airways and SpiceJet rose by 9% and 7%, respectively.

Although the increase in SpiceJet’s share price was attributed by some commentators to reports that Kalanithi Maran and his wife Kavery had left the board of KAL Airways, which owns 48.6% of SpiceJet, sparking rumours of a possible share sale (the reports were later denied by the airline), analysts were at a loss to explain the jump in Jet Airways share price. This surprise was exacerbated by the release of poor October passenger traffic results by the Directorate General of Civil Aviation that showed traffic fell by 15.7% compared to the same period last year.

An expectation of fare increases was given as on explanation for jump and that investors are now pricing in decent earnings for the October-December period.